The Chinese tech market is experiencing a stock-market frenzy with Cambricon Technologies — known locally as Hanwuji — the fabless AI chip designer that has multiplied its value in just a few days. Its stock has soared over 130% in merely two weeks, establishing the company as the hottest name on the Chinese exchange in 2025.
However, behind this rally lie significant risks: overconcentration in a single customer and fierce competition from local giants like Huawei and Alibaba.
From “King of Losses” to Market Star
Until recently, Cambricon was nicknamed in China as the “King of Losses,” having accumulated nearly 5 billion yuan (about $970 million) in losses by the end of 2024. Moreover, its inclusion on the Entity List by the U.S. Department of Commerce in 2022 forced it to rethink its strategy, limiting access to key markets and suppliers.
The situation took an unexpected turn in April 2025 when the Trump administration tightened export restrictions on AI chips to China, compelling NVIDIA and AMD to seek special licenses to sell GPUs in the country. This created an opening for Cambricon, which quickly positioned itself as a local alternative.
A Competitive Product: the Siyuan 590
The new Siyuan 590 chip has been key to this resurgence. According to technical estimates, it achieves 90% of the performance of the NVIDIA A100, with a TPP score of 4.493 versus 4.992 for the American model.
Though its distribution figures are still modest — 145,000 units expected in 2025 — Goldman Sachs estimates that shipment volumes could surpass 2.3 million units by 2030 if current adoption rates continue.
Explosive Revenue Growth
The impact on finances has been immediate. In the first half of 2025, Cambricon reported revenues of $402 million, representing a staggering 4,348% year-over-year growth. This surge has propelled its market capitalization above $90 billion, equivalent to 68% of SK Hynix’s market value, despite sales accounting for just 1.4% of South Korea’s giant.
The disconnect between revenue and valuation worries analysts, who do not hesitate to speak of a possible bubble. Still, the investment bank Goldman Sachs has raised its price target twice in just fifteen days, setting it at 2,104 RMB per share.
Latent Risks
Despite market enthusiasm, Cambricon faces several challenges:
- Dependence on ByteDance: it’s estimated that almost 80% of its revenue comes from this sole client, making the company vulnerable to contractual or regulatory changes.
- Local competition: Huawei and Alibaba, with almost unlimited resources, are developing their own AI solutions, which could erode Cambricon’s market share.
- Overvalued stock: its valuation has grown much faster than its capacity to generate sustainable profits.
A Strategic Race for China
Cambricon’s meteoric rise cannot be understood without considering the geopolitical context. China aims to reduce its technological dependence on the United States and ensure an internal supply of AI chips. In this scenario, Cambricon becomes a strategic piece, though its future will depend on whether it can diversify clients and solidify its technology against both local and global competitors.
Frequently Asked Questions (FAQ)
What is Cambricon Technologies?
It’s a Chinese fabless company designing AI chips. It has gained prominence with its Siyuan 590 chip, comparable in performance to the NVIDIA A100.
Why have its shares risen so much?
U.S. restrictions on GPU sales in China have boosted demand for local solutions, directly benefiting Cambricon.
What risks does the company face?
High dependence on ByteDance as a main client, competition from major Chinese firms like Huawei and Alibaba, and a stock valuation that many analysts consider inflated.
What is Goldman Sachs’ forecast?
The bank estimates that Cambricon could surpass 2.3 million chips shipped by 2030 and has set a target price of 2,104 RMB per share.